Google is still dominant in digital ads. But Facebook’s ad business is now approximately four-times the size of ad revenues at former dot-com giants Yahoo and AOL, which bodes well for the future of social media advertising.
We compared company filings of four major Web companies — AOL, Yahoo, Facebook, and Google — beginning with the first quarter of 2010 through the second quarter of 2013.
At the beginning of the time series in 2010, Facebook pulled in $US340 million in ad revenue for just 4% of the total ad revenue across the four companies we looked at. However, in the second quarter of this year, Facebook reported $US1.6 billion in ad revenue, 11% of total ad revenue among the four companies.
Yahoo and AOL’s ad revenue remained flat over the time series; however, their market share has shrunk, because the digital ad business is significantly larger today than it was three years ago.
So, while Facebook’s ad revenue has grown 370% since the first quarter of 2010, Yahoo’s has declined 1% and AOL’s has grown just 2%.
Google has remained on top and has approximately 83% of total digital ad revenue.
How are the dot-com era giants fighting back? AOL seems to be betting on video ads, having just purchased Adap.tv for $US405 million.
Facebook will also soon roll out video ads, which Morgan Stanley’s Facebook analysts predict will generate another $US1 billion in ad revenue for the social media company in 2014.
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